Are owners guaranteeing the Noodles & Company Franchise Agreement required to ensure the franchisee's representations are true, correct, and complete?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
FOR THE SITE LOCATED AT: In consideration of, and as an inducement to, the execution of the Noodles & Company Franchise Agreement dated as of , (the "Agreement") by and between Noodles & Company ("Franchisor"), and ("Franchisee"), each of amendments). the undersigned owners of a 10% or greater interest in Franchisee hereby personally, unconditionally and irrevocably: (1) guarantees to Franchisor and its successors and assigns, for the term of the Agreement and thereafter as provided in the Agreement, that Franchisee shall timely perform each and every undertaking, agreement and covenant set forth in the Agreement (and any amendments), including the timely performance of all financial obligations, and that each and every representation of Franchisee made in connection with the Agreement (and any amendments) are true, correct and complete in all respects at and as of the time given; and (2) agrees personally to be bound by, and personally liable for the breach of, each and every provision in the Agreement (and any Notwithstanding the foregoing, the undersigned shall have no obligation under Section 7.02 or 7.03 of the Franchise Agreement after the second anniversary of the later of (a) the date of the undersigned ceases to have an ownership interest in Franchisee or (b) the date of undersigned ceases to render services to the Franchisee. Each of the undersigned waives: (a) acceptance and notice of acceptance by Franchisor of the foregoing undertakings; (b) notice of demand for payment of any indebtedness or non-performance of any obligations hereby guaranteed; (c) protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed; (d) any right he or she may have to require that an action be brought against Franchisee or any other person as a condition of liability; (e) notice of any amendment to the agreement; and (f) any and all other notices and legal or equitable defenses to which he or she may be entitled.
Source: Item 22 — CONTRACTS (FDD pages 98–99)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, owners with a 10% or greater interest in the franchisee are required to provide a personal guaranty. This guaranty ensures that all representations made by the franchisee in connection with the Franchise Agreement are true, correct, and complete. This obligation extends for the term of the agreement and any amendments made to it.
The personal guaranty also covers the franchisee's timely performance of all obligations, agreements, and covenants outlined in the Franchise Agreement, including all financial obligations. By signing the guaranty, owners agree to be personally bound by and liable for any breaches of the agreement's provisions. This means that if the franchisee fails to meet its obligations, Noodles & Company can seek recourse directly from the owners who have provided the guaranty.
However, the obligation under Sections 7.02 or 7.03 of the Franchise Agreement is lifted after the second anniversary of the later of (a) the date the owner ceases to have an ownership interest in Franchisee or (b) the date the owner ceases to render services to the Franchisee. The owners also waive certain rights, including the right to require Noodles & Company to first bring an action against the franchisee before pursuing the guarantors. This waiver includes acceptance and notice of acceptance by Noodles & Company, notice of demand for payment, protest and notice of default, and notice of any amendment to the agreement.